Typically 12% of basic salary and dearness allowance is contributed by the employee and a matching amount by the employer, part of which goes to the Employees’ Pension Scheme. The EPFO declares the interest rate each year. Interest on employee contributions above ₹2.5 lakh a year is taxable.
Finance glossary
What is Employees’ Provident Fund (EPF)?
The retirement savings scheme for salaried employees in which both employee and employer contribute a share of salary every month.